Powerful Breakaway Gap Makes Citigroup a Buy

by Sam Collins | January 4, 2013 1:00 am

Citigroup (NYSE:C[1]) — This global diversified financial services company provides a wide range of financial products to consumers, corporations and governments. In 2013, revenues are expected to increase by 8% after two years of declines. And earnings are expected to increase to $3.94 in 2012 and $4.65 in 2013.

Technically, C has broken out from a nine-month cup-and-handle formation on a powerful breakaway gap. This type of gap occurs at major turning points, and while most gaps are usually “covered,” i.e., price drops and fills in the hole in the chart, this type often remains “open.”

The break is also supported by a new buy signal from our proprietary indicator, the Collins-Bollinger Reversal (CBR), and high volume confirms it. The stock’s next hurdle is the high of July 1, 2011, at $42.88. But once it overcomes that, the trading target will be $46 and the long-term objective will be $50.